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In Search of Real Rigidities

In: NBER Macroeconomics Annual 2010, Volume 25

Listed author(s):
  • Gita Gopinath
  • Oleg Itskhoki

Are quantitatively important real rigidities present in the data? The answer appears to depend on what data one looks at. Recent studies using price data underlying US CPI index provide evidence suggesting a limited role for real rigidities. Evidence from international prices, however, points towards the importance of strategic complementarities in price setting resulting in considerable pricing-to-market effects. This paper provides further evidence on the role of real rigidities and then proposes a theory to bridge the gap between the two sets of facts.

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This chapter was published in:
  • Daron Acemoglu & Michael Woodford, 2011. "NBER Macroeconomics Annual 2010, Volume 25," NBER Books, National Bureau of Economic Research, Inc, number acem10-1.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 12033.
    Handle: RePEc:nbr:nberch:12033
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    16. Calvo, Guillermo A., 1983. "Staggered prices in a utility-maximizing framework," Journal of Monetary Economics, Elsevier, vol. 12(3), pages 383-398, September.
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